Your Down Payment

Many borrowers can qualify for various loan programs, but they don't have much to put up a down payment. Do you want to look into getting a new house, but aren't sure how you should put together a down payment?

Reduce expenses and save. Be on the look-out for ways to trim your monthly expenses to put away money for a down payment. Also, you can look into bank programs through which a portion of your take-home pay is automatically deposited into savings each pay period. You would be wise to look into some big expenses in your budget that you can do without, or trim, at least temporarily. For example, you might decide to move into less expensive housing, or stay close to home for your vacation.

Sell things you don't need and get a second job. Perhaps you can find an additional job to get your down payment money. In addition, you can put together an exhaustive inventory of things you may be able to sell. Broken gold jewelry can be sold at local jewelry stores. You may have collectibles you can sell at an online auction, or household items for a garage or tag sale. Also, you might want to look into selling any investments you hold.

Borrow money from a retirement plan. Explore the specifics of your individual plan. Some homebuyers get down payment money by withdrawing funds from their IRAs or borrowing from 401(k) programs. Make sure you comprehend the tax ramifications, repayment terms, and possible early withdrawal penalties.

Ask for assistance from generous members of your family. Many buyers somtimes receive down payment assistance from gracious parents and other family members who are eager to help them get into their first home. Your family members may be happy at the chance to help you reach the goal of having your first home.

Contact housing finance agencies. Provisional mortgage programs are offered to homebuyers in specific situations, such as low income homebuyers or homebuyers planning to remodel homes in a certain part of town, among others. With the help of a housing finance agency, you may get a below market interest rate, down payment assistance and other perks. Housing finance agencies may help you with a lower rate of interest, help with your down payment, and provide other advantages. The principal purpose of non-profit housing finance agencies is build up the purchase of homes in certain areas.

Find out about low-down and no-down mortgage loans.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low to moderate-income individuals qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who need to get home financing. FHA provides mortgage insurance to the private lenders, enabling homebuyers who might not be eligible for a traditional mortgage loan, to obtain a mortgage. Interest rates for an FHA loan typically feature the current interest rate, while the down payment requirements with an FHA loan will be below those of conventional loans. The required down payment can be as low as 3 percent while the closing costs may be covered by the mortgage.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This specialized loan does not require a down payment, has mimimal closing costs, and offers a competitive rate of interest. Although the VA doesn't issue the loans, it does certify eligibility to qualify for a VA loan.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes at the same time as the first. In most cases the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. The borrower covers the remaining 10%, rather than having to pull together the typical 20% down payment.

  • Carry-Back loans

    In the option of the seller "carrying back a second mortgage," the seller loans you part of his or her home equity. The buyer funds the highest percentage of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Typically you will pay a somewhat higher rate on the loan financed by the seller.

No matter your method of getting together your down payment, the satisfaction of reaching the goal of owning your own home will be just as sweet!

Want to discuss down payments? Call us at 407-834-3377.

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